Tuesday, September 3, 2024
Extreme economic inequality is one of the main causes of the deep social and political divisions observed not only in America, but across the globe today. Social cohesion is often the first casualty when people don’t feel they have a stake in the economic system where they live. In countries without properly functioning governments that ensure that the poor receive at least a few basic services, such discontent tends to degenerate into rampant crime and mass violence that disrupt life for everyone.
There are regional variations in the reasons for extreme wealth disparity. In America and some developed nations, ultra-rich individuals and large corporations are widely viewed as the culprits, mostly because they use their accumulated financial power to influence tax and other government policies to the detriment of the poor. Elsewhere in the underdeveloped world, especially in Africa, there are hardly any pies to slice to begin with, since not much wealth generation occurs there. Corrupt public officials and their families and cronies simply live lavishly on looted state assets. The worst forms of inequality on the planet exist in those places.
In the intense global debate about how to address inequality, much is said about the need for equality of opportunity. People argue that no one is asking for parity of outcomes. Rather, the widely shared notion is that societies should strive to establish level playing fields on which each of their citizens can compete fairly and have a reasonably good chance of attaining success. I fully agree with that. But how easy is it to construct such turfs?
Currently, much of the global conversation about inequality focuses on taxation. Fair and efficient tax systems help governments obtain the revenues they need to adequately fund the social programs that alleviate poverty. That attention is therefore justified. But where resources are channeled is even more important.
Without question, there is no better way for a nation to provide equal opportunity to its citizens than to make a good, solid public education system accessible to all. Historically, that is the platform that has enabled millions of children from humble beginnings to become highly prosperous adults across the world. The financial stability that such successes bring establishes foundations for future generations within families to pursue their own dreams. This virtuous cycle has changed the fortunes of entire societies.
Unfortunately, that crucial platform is increasingly being taken from underneath poor children all over the world. In America, the way in which K-12 public schools are funded results in children receiving varying qualities of education depending on the zip codes in which their families live. Nationally, the federal government provides around ten percent of the funding for the K-12 public education system. State and local governments furnish the rest. Most school districts in America rely predominantly on local property taxes for their finances, meaning that affluent suburbs with high property values end up with much better schools than poorer localities. In some areas, local governments account for anywhere between fifty to sixty percent of school funding.
There is no such funding disparity in Ghana, where I grew up. There, the national government is the sole source of funds for the public education system. Because Ghana is a relatively small nation, there should, in theory, be no significant variations in the quality of education received by children in different parts of the country. That was the case when I was growing up there but today, there isn’t much of a public education system to speak of. Because of corruption, mismanagement, and widespread teacher apathy, the entire system has become so dysfunctional that only the poorest of families send their children to public schools. Even among the private institutions that have mushroomed in villages, towns, and cities the quality of instruction is quite dodgy in most. So, it is mostly well-to-do families that can afford to send their children to the few good but quite expensive private schools that provide decent basic education.
In America, the poorly performing public schools are often concentrated in urban areas. On top of inadequate funding, such schools face problems with classroom discipline that make effective teaching near-impossible much of the time. Neighborhood violence means that safe passage to school is not even guaranteed. As a result, many parents in these areas routinely choose to either send their children to private schools or homeschool them. Some states are increasingly issuing vouchers to families to send their children to better-performing schools away from their districts.
It is perhaps unsurprising to find such glaring disparities in the education systems of “selfish” America and “corrupt” Ghana. But I was astonished by a recent article that detailed the vast differences in educational outcomes for children in China. Graduates from the country’s one hundred or so top-tier universities are said to earn about a third more from their first jobs than students who obtain their degrees from second-tier colleges. Competition to get into elite universities in China is therefore quite fierce. Parents who can afford it hire private tutors to enhance their children’s chances in the admissions race. In 2021 alone, the tutoring industry in China reportedly generated $100 billion in revenue. A paper cited in the article estimated that students from poor counties were seven times less likely than those from urban areas to attend university, and eleven times less likely to get into elite colleges.
I am generally not a big fan of Chinese President Xi Jinping. But I greatly admire his “Common Prosperity” vision, which seeks to make China’s economic system fairer for all citizens. In furtherance of that goal, the government has banned most for-profit tutoring services for students in the first nine years of education, which is compulsory in China. But the ban hasn’t worked, according to reports. The tutoring enterprises are now said to operate illegally, making their services a lot more expensive. That means only the wealthy can afford them now, and that has made the playing field even more distorted. To Xi Jinping’s chagrin, his citizens may live in a communist nation that preaches social equality, but they are still human beings who are self-interested creatures.
When I was in senior secondary school in Ghana in the early 1980s, I faced the problem that students from poor Chinese families encounter today. There were teachers in my school who organized private tutoring sessions that were quite expensive. Some teachers would deliberately leave large sections of regular class lessons uncovered, making attendance of their private sessions a must. My math teacher was particularly guilty of that underhanded tactic. Because my poor family could not afford the fees, I was left out and I had to learn a lot of difficult material on my own. I managed to pass the university entrance exam, but it took backbreaking effort.
I don’t think my two children will ever fully understand how privileged they are. Because of where our family lives in eastern Pennsylvania, they attended one of the best public schools in the state. They received top-notch education and took all kinds of advanced placement courses and exams in high school. After all that, when it came time for them to apply to college, I paid for them to attend private SAT and ACT prep classes. I was fully aware that not every family could afford to do that for their children. In essence, I was tilting the playing field in favor of my children. I felt sorry for myself during my boyhood days in Ghana when I was left out of those private tutoring sessions, but today, I am doing the same thing to some poor children in America. When I look in any mirror nowadays, I see a big hypocrite.
The problem is that many—if not most—of us try to push our children to become one-percenters. We go to great lengths to try to get them into the most elite of colleges. Our hopes are that they will someday become billionaire hedge fund managers and techpreneurs. We vilify today’s ultra-rich mostly because we feel that they use their power to block the path for us to get to where they are. But I am not so sure that if my children were to somehow become fabulously wealthy one day, they would be any more willing to pay their “fair share” of taxes than the current plutocrats are. They would probably point to that “fellow behind the tree” and ask the government to tax him instead.
We all talk a good game about wanting to see a level playing field for everyone. Our actions however suggest otherwise. Over-concentration of wealth is definitely a problem that warrants serious examination. We can legitimately point our fingers at the one-percenters when we look for someone to blame for extreme inequality. But perhaps we should look at ourselves a bit more. Because our numbers are so much greater than that of the plutocrats, the little, seemingly inconsequential steps that each of us takes to help our children beat the competition shouldn’t be overlooked. When taken in aggregate, they constitute enough of a weight that tips the turf so badly that whatever patch of it is left for the poor is practically unfit to play on.